Keeping rare earth mineral mining clean and green

By Kim Polley, Managing Partner

How do we balance the urgent demand for critical minerals required in clean technologies with where they are sourced?

Coming out of the World Economic Forum (WEF) in January was a tacit acknowledgement that the mining sector will be critical in achieving global clean energy goals. This is not just because so many miners are setting up their own micro-grid renewable energy systems, it also comes down to the fact that minerals like lithium, cobalt, nickel and rare earth elements are currently in short supply and demand for them – as a result of their use in green technologies – is forecast to rise by up to 500%.

One fact that is worth mentioning is that a typical electric car requires six times the mineral inputs of an ordinary car, and an onshore wind plant requires nine times more mineral resources than a gas-fired plant. By 2026, electric vehicles, or EVs, will account for half of cobalt demand.

Failure to meet demand puts us in grave danger of not only missing the targets for reducing temperatures and decarbonising global systems by 2030, but also creates a greater uncertainty in relation to how we develop and deliver greener technologies. This is due to concerns about the availability of the critical minerals needed for the energy transition.

Responsible sourcing commitments from the mining industry

So, we know being able to service demand for these critical minerals is an issue. However, what surprised me about the recent media coverage of WEF on this issue, is that there was no mention of how it is impacted by responsible sourcing commitments. After all,the development of renewable technologies relies on minerals such as lithium and cobalt, which are often sourced from areas with poor human rights practices.

While some initiatives for responsible sourcing exist, they have not been expanded to include most minerals and metals crucial to green energy technologies. This creates a balancing act between promoting green technologies to address climate change and ensuring that responsible sourcing practices don’t take second place to “progress”.

Stakeholders are calling for a broader approach to responsible sourcing by mining companies, but it will be interesting to see how this is practically implemented. Especially in light of the predicted extreme demand pressures as we move towards more and more green technology developments.

Read how to extract ESG opportunities within the mining sector